Stuart A. Umpleby

Department of Management Science

The George Washington University

Washington, DC  20052, USA






Reforming socialist societies requires changes in values and beliefs in addition to institutions and skills.  But changes in values should be brought about in a democratic fashion through conversation and the comparison of perceptions.  A few quite simple methods exist for comparing conceptual systems and thereby focusing discussion on the cultural foundations of economic institutions.  Once a cultural system is clearly defined, more sophisticated methods can be used to provide additional understanding.  Devising appropriate actions to take as a result of these conversations is left to the individuals in these societies to decide.



1.  Defining the Problem


In recent years, and especially in recent months, increasing attention has been given to how the Soviet Union, China, and the nations of Eastern Europe can make the transition from centrally planned, authoritarian systems to free market, democratic systems.  Most of the attention has focused on fairly tangible things like institutions and skills.  For example, several countries are now working to establish capital markets and government agencies to regulate these markets.  There are a growing number of cooperatives, public discussion groups, and new organizations concerned with the environment.  Regarding needed skills, many new educational programs and institutions are being established to fulfill the demand for people with the training needed to manage business firms in a market environment.


However, the new organizations frequently encounter obstacles in the form of deeply held social values.  For example, a colleague from Eastern Europe recently stated that the people in his country want to give workers stock in their companies in order to increase their motivation to work, and they want to set up a stock market to allocate financial resources more efficiently.  But, when it was pointed out that people who do not work for a company would need to be able to own stock in the company, he said that that would not be permitted because it would enable speculation and exploitation.  Hence, the reforms in socialist countries have encountered popular resistance partly because they seem to legalize behavior long considered illegal and immoral.


Transferring institutions and educational programs from one country to another is fairly easy to initiate. But making the new institutions work as intended is a much more difficult problem.  Each country can benefit from the experiences of other countries.  But each country must ultimately devise its own solutions compatible with its traditions.


The transformation of a national political and economic system requires that changes in institutions and values proceed in parallel.  Hence, it is important to think through strategies for changing values as well as changing institutions.  But the methods used to change values must be consistent with the intended result of democracy.  The most obvious strategy for changing values, which is consistent with democracy, is to encourage participation in discussions.


Assuming that all participants are genuinely interested in conducting a serious conversation, what issues need to be discussed?  Should the discussion focus on ideologies like capitalism and socialism, on laws and procedures like private property and free elections, on civil liberties such as free speech and free press, or on underlying assumptions about human nature and the proper role of government?  Discussions of all of these topics are perhaps useful, but I suspect that the most fruitful discussions will concern the most fundamental issues.  That is, the most useful discussions will concern ideas that people take so much for granted they had not previously imagined that other people could think differently.



2.  Describing Conceptual Systems


A method which I have found to be useful for comparing conceptual systems is to make a table listing the key features of two or more points of view.


Table 1 contains a list of differences between Western social systems and the Stalinist social system, which existed to some degree in the Soviet Union, China, and Eastern Europe until the late 1980s. Because changes have been occurring so rapidly in recent months, I have not attempted to describe the current situation in the socialist countries.  Usually when such a table is presented, the discussion will explain the elements in the table.  However, my purpose here is to make some methodological comments about the use of these tables.


Table 1






In the absence of strong                In the absence of strong

government social systems are           government social systems are

basically stable                        basically unstable


Human beings can and should             Human beings are unable to

rule themselves                         rule themselves; their

                                        behavior must be controlled

                                        just as parents control the

                                        behavior of children


All human beings are created            Some people are more capable

equal; one person one vote              than others; the best (most

                                        reliable or loyal to the

                                        Party) should rule


Freedom permits each individual         Freedom permits chaos and

to pursue his or her dreams             violence


Government is necessary only            The task of government is to

to provide services people              provide order.  The existence

cannot provide themselves               of government is taken for



A political party formulates            The Party has absolute control

positions on issues and offers          of the government, the economy

candidates for election                 and ideology;  Party officials

                                        control one's job, housing,

                                        education, and travel


The pursuit of self-interest is         The pursuit of self-interest

the engine of progress                  should be disapproved; the

                                        group comes first


Class differences are reduced           Class struggle is the engine

by income and inheritance taxes         of social progress

and by equal opportunity


Power must be divided (among            Power must be centralized in

legislative, executive, and             order to control the society

judicial branches) to prevent          

the government from curtailing         

individual liberties


Human rights are granted by             "Human rights" are rights not

God or nature and the government        of an individual but of

may not infringe them                   society


A bill of rights lists what the         A bill of rights lists what

government may not do -- limit          the state must do -- provide

freedom of speech, press,               housing, education, health

religion, etc.                          care, etc.


What is not forbidden is                What is not permitted is

permitted                               forbidden


Private property is a guarantee         Private property permits the

of individual liberty                   exploitation of one individual

                                        by another


A heroic person is willing to           A heroic person is willing to

compromise with an opponent             confront an opponent


Conflicts are generally                 Conflicts generally escalate

resolved through compromise             until resolved by a person in

and negotiation                         authority


Social change is achieved               Social change is achieved

through a legal or market               through an administrative

mechanism -- by changing the            mechanism -- through the

structure of incentives                 party hierarchy or through

                                        central economic planning


Efficiency is maximized by              Efficiency is maximized by

having profit oriented units            concentrating expertise and

compete                                 by planning


The economic system should              The economic system should

permit free exchange of goods           produce and distribute needed

and services                            goods and services


Capital is most efficiently             Capital is put to the best

allocated through capital               social use through the central

markets such as stock exchanges         planning process


Prices are the result of                Prices are set by the

supply and demand                       government to insure social



Profit is good; it results from         Profit to an individual is

providing a desired service at          bad; it is the result of

a competitive price                     exploitation


"The customer is always right,"         The customer is a supplicant;

else the customer will switch           the quality of goods is

to a competing supplier                 determined by the supplier


Labor unions are permitted in           Labor unions independent of

order to achieve a fairer               the Party are not necessary

distribution of wealth                  and are not permitted



A table such as the one above is a way of summarizing and comparing perceptions.  It inevitably reflects the views of the person or persons who constructed it.  Such a table should not be regarded as an authoritative description of two social systems, but rather as a way of stimulating further conversation.  The process of jointly creating such a table can be awkward in that descriptions of one society by a person from another society can be interpreted as criticisms.  Hence, it is very important for the table to be presented as a starting point for a conversation.



3.  Moving from One System to Another


Once such a table is made, analysis can be carried further by looking for dichotomies within the table.  These dichotomies can then be arranged as two dimensions describing four quadrants (see Figure 1).  I first used this type of analysis in 1972, and I have used it several times since then (Umpleby 1972, 1990a, 1990b).  But this method is not new. In fact this type of analysis is a variation of what Fritz Zwicky (1969) called "the morphological approach."





I                                  |  II


Strong authority                   |              Democracy

with openness                      |             

(schools)                          |             


                  glasnost         |       

                              -----|--> ^

                              |    |    |


Assume differences            |    |    |     Assume equality of

in capability                 |    |    |            opportunity


III                                |  IV 

                                   |       nationalities

                                   |       disputes


Strong authority                   |      Distrust with equality

with secrecy                       |      (international system)






        Figure 1.  Generating Additional Systems or Strategies



In Figure 1 quadrants II and III represent the two conceptual systems described in Table 1.  Quadrants I and IV describe additional social systems.  Depending upon one's purpose, one could regard the two additional social systems either as important additional systems to be described in an expanded table or as intermediate steps in moving from one quadrant to the diagonally opposite quadrant.  Intermediate steps may provide a way to make social change less abrupt and more manageable.  For example, if we assume that quadrant III represents the Soviet Union in 1985 and quadrant II represents the Western democracies, then proceeding from III to II through quadrant I is similar to the policy of glasnost, while proceeding through quadrant IV brings to mind the nationalities disputes in the Soviet Union.


This type of analysis is very easy to do, and by using several diagrams it is possible to gain new insight into some fairly complicated issues.  For example, Figure 2 uses two dimensions (central planning - free markets; rugged individualism - welfare state) to depict the hypothesis that capitalist and socialist societies are converging.  Figure 3 depicts the different strategies adopted by the Soviet Union and China in recent years by using the two dimensions (central planning - free markets; totalitarianism - democracy).



4.  Examining Conceptual Systems


Once the conceptual systems of interest have been clearly defined, one can then consider some more complex phenomena.  For example, one can look for inconsistencies within a conceptual system.



                        Welfare State


     Socialist                |              Western

     Countries                |              Europe

     in 1970s                 |              in 1980s          

                      --------|----->  ^

                              |        |

                              |        |


Central Planning              |        |            Free Markets

                              |        |

                              |        |


                              |              United States

                              |              in 1920s


                    Rugged Individualism



     Figure 2.  Convergence of Capitalist and Socialist Societies





     Perhaps Japan            |              Western

                              |              Democracies   


                    USSR      |                            

                        ------|---> ^

                        |     |     |


Central Planning        |     |     |               Free Markets

                        |  ---|------

                              |       China


     Stalinist                |              Some Third                                  

     System                   |              World Countries





              Figure 3.  Two Paths Toward a Mixed Economy



Rachel Walker (1989) has described an inconsistency in the Marxist-Leninist system.   The inconsistency takes the form of a "double bind," a psychological phenomenon which was first described by

Gregory Bateson.  The double bind that Walker has identified has to do with the problem of creativity.  The Communist Party of the Soviet Union (CPSU) defends Marxism-Leninism against "deviationists" and "revisionists."  On the other hand members of the Party are told that "loyalty to Marxist-Leninist teaching" is expressed through its "creative development."  The result is that people feel a high degree of internal tension.  To defend the doctrine is to risk being called a "dogmatist."  But to propose changes is to risk being labeled a "deviationist."  Not to do either is to risk being accused of not being a Marxist-Leninist. The tension is compounded because some sanction is implied in each of the three cases.  One result is that the CPSU is in a position of absolute power because only it can define what "permissible creativity" is.  A second result is that people lose interest in trying to improve society.


Finally, one can examine a conceptual system by looking at its consequences.  Ideas about social systems, unlike ideas about physical systems, change the way that social systems operate.  If one accepts this view, then an interesting result is possible.  Ideas which are unappealing sometimes have appealing results, and ideas which are appealing can have unappealing results.  The ideologies of capitalism and socialism can serve as examples. Capitalism is based on the pursuit of self-interest.  In extreme form it praises greed.  Adam Smith argued that individuals will be led by "an invisible hand" to improve society as a whole, but a society that seems to encourage greed is not based upon an uplifting doctrine. Nevertheless, societies which have adopted Smith's idea have prospered and have been emulated by other societies. On the other hand, socialism is based on the appealing idea that society should be concerned about those less fortunate.  Yet this very moral intention has not always produced moral results.  As Vaclav Havel (1990), the new president of Czechoslovakia said in his New Year's Day address,


The worst thing is that we are living in a decayed moral environment.  We have become morally ill, because we have become accustomed to saying one thing and thinking another.  We have learned not to believe in anything, not to have consideration for one another and only to look after ourselves.


Despite its unappealing ideology, capitalism, with its emphasis on the rights of the individual, confronts each citizen with the question of how much of his personal wealth to spend on himself and how much to give to various charities.  The United States, which has been slower than the European countries in developing a social "safety net" has, partly in its place, developed an elaborate "grants economy."


Ideas about social systems can be evaluated not only on the basis of their immediate appeal but also on the basis of their consequences when acted upon.  Ideas which emphasize personal responsibility tend to promote the development of individuals as well as society.





Liying Feng, William Halal, Jixuan Hu, Pavel Makeyenko, Yuri Olkhovsky, Valeria Ryssina, and Xiaoyun Sun made helpful comments on early drafts of this paper, but they bear no responsibility for the views expressed.





Havel, Vaclav. "Our Freedom,"  The Washington Post, January 3, 1990, p. A15.


Umpleby, Stuart A. "Is Greater Citizen Participation in Planning Possible and Desirable?"  Technological Forecasting and Social Change, 4/1, Fall, 1972, pp. 61-76.


Umpleby, Stuart A. "The Science of Cybernetics and the Cybernetics of Science," Cybernetics and Systems, 21: 109-121, 1990.


Umpleby.  Stuart A. "The Scientific Revolution in Demography,"  Population and Environment,  Volume 11, Number 3, Spring, 1990, pp. 159-174.


Walker, Rachel. "A Self-limiting Revolution? -- Marxism-Leninism and the Problem of Creativity,"  Detente, Numbers 9 and 10, 1989, pp.


Zwicky, Fritz. Discovery, Invention, Research through the Morphological Approach,  Macmillan, 1969.


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